Financier with GOP ties gets $5M to move firm to Greenwich

Neil Vigdor

Updated 10:13 pm, Friday, July 26, 2013

A $2 billion money-lending enterprise headed by a major benefactor of the Connecticut GOP is moving its headquarters from out of state to Greenwich, lured by $5 million in economic incentives approved by the administration of Democratic Gov. Dannel P. Malloy.

Malloy's office announced the deal Friday between the state and Fifth Street Finance Corp., a Nasdaq-traded company based in White Plains, N.Y., employing about 50 people there. Terms of the deal call for the firm to add an additional 46 positions to its Greenwich workforce over the next decade.

The firm is run by Leonard Tannenbaum, whose state and federal filings show he gave $15,000 to the state Republican Party in March of this year, earning him a seat on the dais at the party's biggest fundraiser of the year, where GOP leaders assailed Malloy.

Republicans have been highly critical of the economic incentives awarded by Malloy's administration to big business, questioning the return on investment and saying that the state should lower taxes and fix the regulatory climate instead.

"If the governor uses these grants to attract businesses that have longterm staying power and peripheral benefits, I think it's good," Tannenbaum told Hearst Connecticut Newspapers.

"The governor, for us, is going to make far more revenue for the state of Connecticut than the amount of money that he's giving us by many, many multiples."

Records also show that Tannenbaum, 41, a Greenwich resident who last year started his own Keeping America Competitive bipartisan political action committee, donated $1,000 to the campaign of Malloy's 2010 adversary Tom Foley.

"When it comes to something as important as job creation, politics never enters the governor's mind," said Andrew Doba, a spokesman for Malloy. "He is concerned with one thing -- creating good paying jobs with good benefits for Connecticut residents."

Tannenbaum's goal is to reach 100 employees in Greenwich within three years, surpassing the benchmarks stipulated by the state.

"We'll easily be able to hit those targets," Tannenbaum said.

James Velgot, the firm's executive director of marketing and brand management, echoed Tannenbaum.

"This company of ours is on quite a trajectory," Velgot said. --Len really believes in Connecticut and wants to help create jobs."

In addition to Connecticut, Tannenbaum said New York and Florida were competing for his business, which lends money to private equity companies.

"My business is portable," Tannenbaum said. "We could actually do our business out of Miami, too. My personal view was that Connecticut was the place to go."

Tannenbaum is in the process of trying to buy the former corporate headquarters of Nestle Waters North America at 777 W. Putnam Ave. to facilitate the move, a transaction that is expected to cost some $39 million.

The state sweetened the deal with a $500,000 grant for job training and a $500,000 grant to install a fuel cell, wind or solar-powered energy system. The deal is binding for 10 years.

"So if I leave within 10 years, you just give back the money," Tannenbaum said.

State Sen. L. Scott Frantz, R-36th District, who represents Greenwich and parts of Stamford and New Canaan, embraced the deal in a statement issued by the governor's office.

"Connecticut has long been a world leader in finance and investment management," Frantz said.

"We must focus on helping this important segment of our economy remain and grow in our own state."

Tannenbaum expressed his support for Malloy's efforts to attract companies in the biotech sector to Connecticut with economic incentives.

At the same time, he questioned the wisdom of giving a $20 million forgivable loan to Swiss financial services giant UBS in 2011 to maintain a presence in Stamford and at least 2,000 employees in the state until 20 17.

UBS previously had 3,500 employees on its payroll in Connecticut, however.

"I think a mistake he potentially made was UBS," Tannenbaum said of Malloy. "So if their strategic direction is to leave the state, does that make sense?"